P17-32B True Technology, Co., manufactures CDs and DVDs for computer software and

Price: $3.99 


P17-32B
Preparing and using a job cost record
True Technology, Co., manufactures CDs and DVDs for computer software and
entertainment companies. True Technology uses job order costing and has a perpetual inventory system.
On November 2, True began production of 5,500 DVDs, Job 423, for Leopard pictures for $1.60 sales price per DVD. True promised to deliver the DVD’s to Leopard by November 5. True incurred the following costs:

Date Labor Time Record No. Description Amount
11/2 655 10 hours @ $18 $ 180
11/3 656 20 hours @ $14 280
Materials
Requisition
Date No. Description Amount
11/2 63 311 bs. polycarbonate plastic @ $12 $ 372
11/2 64 25 lbs. acrylic plastic @ $29 725
11/3 74 3 lbs. refined aluminum @ $48 144
Leopard Pictures provides the movie file for True to burn onto the DVDs at a cost of
$0.45 per DVD. True Technology allocates manufacturing overhead to jobs based on
the relation between estimated overhead of $550,000 and estimated direct labor
costs of $500,000. Job 423 was completed and shipped on November 3.

Requirements:

1. Prepare a job cost record similar to Exhibit 17-6 for Job 423. Calculate the predetermined
overhead rate, then allocate manufacturing overhead to the job.
2. Journalize in summary form the requisition of direct materials (including the
movie files) and the assignment of direct labor and manufacturing overhead to
Job 423.
3. Journalize completion of the job and the sale of the 5,500 DVDs.